Tight appraisals hurting home sales

By: David Winzelberg June 22, 2009Comments Off on Tight appraisals hurting home sales

Industry experts say home sales are in trouble because appraisers are being more conservative, appraising homes for less than what buyers have agreed to pay.
According to an article on rismedia.com, some homeowners can't refinance their mortgages because appraisers say their homes are worth less than they had counted on.
New rules for lenders have creating the ...

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Appraisers based their property value estimates on what is actually happening in the marketplace. There are very few ‘arm’s length sales’ that have actually closed, and current listings continue to demonstrate
price declines. The market most likely will continue to demonstrate declining trends as long as unemployment increases, real estate taxes increase, and other than first time homebuyers, sellers can’t sell in order to move up.

Since you’re singing from the NAR hymnal, you should at least acknowledge the name of the tune. (NAR ‘Economist’ Larry Yun widely quoted in recent media reports from a press release similarly trying to blame appraisers for price declines.)

Forget about Yun’s bleating – Dog bites Man. Brokers and used house sales flacks, who have no accountability for the long term viability or perfomance of the trnasaction, are not the people for whom the appraisers are (or should be) working. The broker/sales flack should have no interest in selecting the appraiser. That they often did, demanding illegal kickbacks in the process and pre-shopping appraisal jobs to be sure the person hired could “hit the number”, should have been the red flags of the bubble excess.

The appraiser is primarily working for the lender, to ensure that the collateral for the loan wil provide sufficient value in the event of a default. The appraiser is only secondarily working for the buyer, to validate the purchase price. Considering the buyer is paying the freight, even this is twisted, though in most cases the lender and buyer’s interest are alligned.

News organizations should just ahve the integrity to report the news – prices are falling unabated. ‘Releif’ on the horizon is a mirage conjured by interested parties (like real estate sales advertisers).

Great response and accurate. Hopefully the AMC’s won’t react to their client’s pressures to hit the mark instead of the market. Those buyers who want to offer more than what is the market can pay the difference up front….that’s the way it use to be. When I taught appraising I always told trainees that if the market is represented by REO’s, forclosures and short sales than thats the market. I also remember getting that same information when I took real estate agent classes. Keep the comments comming, as an appraiser I am tired of getting the blame when a realtor can’t close a deal.

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About the Author

David Winzelberg covers real estate, franchising, and white-collar crime for Long Island Business News.